Union Budget 2025: Impact on India’s Travel and Tourism Sector
Announced on Feb 1, 2025, The Union Budget 2025-26 focuses on various schemes and promotions in multiple segments, including travel. The Union Finance Prime Minister, Nirmala Sitharaman, presented her eighth budget for the progress and development of India as a whole. Among various segments, there is a high emphasis on travel and tourism to promote India as a key travel destination on the map. The Union Budget Travel and Tourism 2025-26 brings optimism to the boost of the Indian economy.
Union Budget 2025: Modified UDAN Scheme to Boost Regional Connectivity
Finance Minister Nirmala Sitharaman has announced a revamped UDAN scheme in the Union Budget 2025 to improve air travel across India. The updated scheme will add 120 new destinations, including smaller airports in hilly regions, Northeast districts, and aspirational areas. This move aims to make air travel more accessible and promote regional development.
The government’s focus on better connectivity will help people travel easily and boost local economies. This expansion under UDAN will support the growth of air travel in remote and underserved areas, making flying more affordable for everyone.
Key Initiatives Of Union Budget Travel 2025-26
1. Increase In Budget Allocation For Tourism Development
The Indian government has allocated significant funds to enhance the country’s travel and tourism sector. It primarily focuses on:
- Preservation of heritage sites
- Pilgrimage tourism, especially in regions tied to Lord Buddha’s teachings and life, under Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD) and Swadesh Darshan 2.0
- Development of new eco-tourism and adventure hubs
- Development of tourism institutions, such as Institutes of Hotel Management (IHMs) and the Indian Institute of Tourism and Travel Management (IITTM)
- Heal in India and medical tourism.
The initiative and schemes are expected to uplift Indian tourism and enhance the overall travel experience for all travellers.
2. Boost To Regional Air Connectivity & Aviation Sector
As some parts of the country have underdeveloped air connectivity, the government aims to enhance the aviation sector to help people easily travel across the country. The UDAN scheme is receiving push with:
- More fund allocation for expanding regional airports
- Focus on affordable travel for remote regions and smaller cities
- Development of helipads and water aerodromes
The focus is to bring air connectivity to 120 new places that may make travel more accessible to tier-2 and tier-3 regions. It can drive domestic and international tourism growth and lead to the overall development of the tourism sector. The modified UDAN scheme may open doors for the hospitality sector, catering to business and leisure travellers in upcoming tourism hotspots.
3. Incentives For Sustainable & Eco-Tourism
The government continues to promote sustainable growth and development, including eco-tourism. The budget promotes:
- Conservation of biodiversity and ecosystems through various programmes like the protection of wildlife
- Sustainable tourism practices, such as encouraging nature-based tourism activities that conserve natural resources and reduce carbon footprints
- Development of eco-tourism structures, such as green hotels and waste management systems
- Financial support and tax incentives for businesses involved in eco-tourism.
The Union Budget Travel and Tourism 2025-26 focuses on eco-tourism to protect the environment and create unique green tourist hotspots to attract travellers worldwide.
4. Streamlining Visa Policies And Promotion Of Digital Tourism
The government is taking the initiative to simplify visa and e-visa policies for a smooth travel experience. To attract more international tourists, the government has:
- Proposed expansion of e-visa for more countries.
- Increased digital marketing for Incredible India 2.0
- Seamless foreign exchange benefits for tour operators
The steps may help India compete with global travel destinations and invite more foreign travellers to explore and travel quickly.
5. Development Of Rail & Road Infrastructure
The Union Budget 2025-26 outlines heavy investment in:
- Increase in semi-high trains on tourist routes, like Vande Bharat
- Elevation of highways and expressways for seamless road travel
- Provisions and improvement of railway stations with world-class amenities.
With seamless train and road connectivity and well-established infrastructure, travellers may have reduced travel time and incredible travel experiences. The initiative may boost travel and tourism in offbeat and remote destinations.
Union Budget 2025-26 Is A Major Step Towards Indian Tourism Sector
Post-pandemic, the country is in full mode to heighten tourism in India. The spectacular sea and airport connectivity, revised tax slabs and TCS limits, employment-led growth opportunities, and much more are some of the important schemes and initiatives by the government to make India among the top destinations in the world. Check out the key highlights of The Union Budget Travel and Tourism 2025-26 below:
1. Revision Of Tax Slabs
The foremost highlight of the Union Budget 2025-26 remains the exemption to pay taxes by individuals earning up to INR 12 lakh annually. It is a significant increase from the previous INR 7 lakh threshold, reducing the financial burden on the middle class. This will lead to more money in the hands of Indians for household consumption, saving, investment, and travel.
One of the key demographics among middle-class Indians is travel. The revision of tax slabs and the travel interests of the middle class, together, may provide a significant tourism boost. Indians will, then, have accessible travel. Reducing tax outflows may also help students studying overseas and seeking medical health treatment abroad.
2. Strengthening Of Regional Air And Sea Connectivity
There is a modified version of the UDAN scheme to improve regional connectivity for more comfortable and easy travel. It targets 120 new destinations to establish helipads and airports in the country’s mountainous, aspirational, Bihar, and North-East regions. The Union Budget 2025-26 is proposed to facilitate the shipbuilding clusters further to heighten the capacity, range, and categories of ships and cruises. Integrating IT, infrastructure, and skilling may develop a robust structured ecosystem. The minister has proposed to set up a Maritime Development Fund with a corpus of INR 25,000 crore for long-term financing for the maritime industry. Relaxed e-visa norms and more accessible and functional regional connectivity boost Indian tourism.
3. Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD)
The Union Budget Travel 2025-26 is proposed to promote India as a major pilgrimage destination, especially to project it as the birthplace of Lord Buddha. PRASHAD aims to identify pilgrimage destinations and develop them seamlessly for higher tourist visits and sustainability. The synergizing of efforts by stakeholders and institutions and the budget may enrich religious, spiritual, heritage, and cultural tourist experiences.
4. Assistance to IHMS/FCIs/IITTM/NIWS
Human resources play a crucial role in tourism development. The budget extends assistance to establish, expand, and upgrade major institutions, including Institutes of Hotel Management (IHMs), Food Craft Institutes (FCIs), the Indian Institute of Tourism and Travel Management (IITTM), and the National Institute of Water Sports (NIWS) to educate and upskill youth to acquire the skillset for the tourism industry.
5. Promotion Of Tourism Infrastructure
The exceptional tourism development demands the finest hospitality, marketing, streamlined e-visa norms, and more. The Union Budget 2025-26 aims to develop 50 tourist destinations in collaboration with the state governments through a challenge mode. The budget required building key infrastructure, including hotels and homestays. There is special emphasis on India’s spiritual and religious significance, with a high focus on the destinations related to the life and times of Lord Buddha. Additionally, the budget focuses on ‘Heal in India’ in partnership with the private sector to promote medical tourism.
Final Thoughts On Union Budget For Travel and Tourism 2025-26
Image Credit: nevarpp for Depositphotos
The Indian government has increased the overall tourism budget by approximately 5% to INR 25.4 billion to boost travel and tourism. The target of 50 premier tourist destinations and the air connectivity to 120 new places will enable an estimated additional 4 crore passengers to explore India over the next 10 years. Overall, the budget presents a positive outlook for the country’s travel and tourism sector. With high allocation of funds, global trends, digital transformation, technology, and sustainable tourism incentives, India’s tourism can be a game-changer for tourism and hospitality. Hence, there is optimism for a drastic boost in the Indian tourism sector shortly.
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